"Rumors of Europe’s Death Have Been Greatly Exaggerated"     Print Email

Ever since the creation of the Euro in 1999, it has been fashionable in some quarters to prophesy the failure of Europe’s single currency. As EU Ambassador João Vale De Almeida pointedly noted, economist Milton Friedman had famously predicted that the European currency would not be able to withstand the first real “crisis.”

Addressing Europe’s sovereign debt crisis in a detailed and compelling speech last week in Washington, (Click here for full text.), the Ambassador readily acknowledged that “we’ve certainly had a deep and profound crisis, unprecedented in our generation”.  Indeed, in 2009 real GDP shrank by 4% and over 6.3 million people lost their jobs in the Euro area.

Yet, as 2010 enters its final quarter, it is increasingly evident that the monetary union has withstood the challenge through a combination of central bank initiatives, capital injections of nearly €300 billion and €2.5 trillion in guarantees, and sheer political will.

Furthermore, lessons have been learned. Concrete efforts are underway to strengthen the governance of the euro area, through strengthening of the “corrective arm” of the Stability and Growth Pact and ensuring the  integrated surveillance of the debt dynamics of member states.

Adjudged Ambassador Almeida, the crisis “saw European leaders demonstrate their capacity to work together quickly and decisively to coordinate a policy response that was appropriate to the situation.”  Moreover, it seems to be working.

European Affairs

 
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    To the union leaders who occupy offices inside, the big white building just north of Lafayette Square in Washington is known as The House of Labor. Encased on marble, with a view of the White House, it exudes the power that once belonged to leaders of American labor unions to help pick and elect Democratic Party presidents and push their agendas through Congress.

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UMD Jean Monnet Research Project

Infrastructure Planning and Financing: Lessons from Europe and the United States

The University of Maryland has received a Jean Monnet grant from the EU to conduct a series of policy exchanges between Europe and the US on filling infrastructure needs and the utility of public/private partnerships as the financing mechanism. If interested in participating in or receiving more information about these exchanges, please contact Rye McKenzie (rmckenzi@umd.edu).

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New from the Bertelsmann Foundation

The Bertelsmann Foundation is an independent, nonpartisan and nonprofit think tank in Washington, DC with a transatlantic perspective on global challenges.

"Edge of a Precipice" by Nathan Crist

"Newpolitik" by Emily Hruban

 

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